Q—What is the ‘discharge’ defense?

Another sticky area of contract defenses is the area of discharge, on account of plaintiff’s repudiation of the contract or plaintiff’s own material breach of the contract.  If plaintiff repudiates a dependent promise or materially breaches the contract itself, then the defendant will allege that it has been discharged from performing the contract, due to plaintiff’s repudiation of the contract.  Long Trusts v. Griffen 222 SW3d 412 (Tex. 2006).

Stated another way, a party that does not perform its own obligations cannot enforce the remaining terms of the contract against the defendant.  Interestingly, of course, from defendant’s point of view, if the plaintiff repudiates the contract, or if plaintiff materially breaches the contract, this will also support defendants own breach of contract claim against the plaintiff, through a counter-claim by the defendant against the plaintiff.

Q—What about the ‘venue’ for breach of contract lawsuits?

 

Although venue, in Texas collection actions, is a long and involved area of the law, for this discussion, it also can be a defense for a defendant.  If a breach of contract lawsuit is brought in the wrong county, a defendant may defend such contract obligation and seek a transfer, if the contract provides specifically that the obligation was to be performed in a certain county or a definite place Tx. Civ.  Prac. & Rem. Code sec 15.035(a)

For instance, in Justice of the Peace cases, a lawsuit based upon an oral contract for labor actually performed may only be brought in the county and precinct, where the labor was performed. KW Construction v. Stephens 165 SW3d 874 (Texarkana 2005).  In suits brought against a defendant based upon a written contract involving a consumer transaction for goods, services, loans, or extensions of credit, which is intended for personal, family or household or agricultural use, such collection suit must be filed either in the county where the defendant signed the contract or the county where the defendant resided when the suit was commenced. 

Trying to restrict or change venue, and enforce against the defendant, can backfire because there are several Texas Supreme Court cases that say that generally any agreement in a contract in which the parties try to restrict mandatory venue, is void as being against public policy.  This is not true in large transactions, however, and choice of venue provisions are completely enforceable in what is called “major transaction”, which is defined as a commercial transaction involving at least $1,000,000.00 in controversy.

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